WFE Webinar: The Effects of Going Public on Firm Performance and Commercialization Strategy: Evidence from International IPOs
“The Effects of Going Public on Firm Performance and Commercialization Strategy: Evidence from International IPOs”
Wednesday 20 July 2022, 13:00 to 14:00 BST
Moderator: Dr. Pedro Gurrola-Perez, Head of Research, The World Federation of Exchanges
Presenter: Francisco Urzúa, Reader in Finance at Bayes Business School (formerly Cass)
Summary: We study the effects of going public using a unique panel of firms in 16 European countries for which we observe financial data before and after firms' initial-public-offering (IPO) attempts. We compare firms that complete their IPO with firms that withdraw their IPO. We find that firm profitability goes up after going public - contrary to previous results in the literature. The increase in profitability is stronger for firms in countries with higher disclosure requirements and investor protection. We also find a post-IPO expansion in sales per employee, the number of subsidiaries and countries in which IPO firms operate. Overall, our results are consistent with going public inducing a shift in strategy towards commercialization to increase profitability.